Is the China Tech Rally Over?

Is the China Tech Rally Over?

Mainland Chinese investors sold nearly $6bn of Tencent [TCEHY], Alibaba [BABA] and Xiaomi [XIACF] shares in June, Bloomberg reported, pulling back from a tech rally that had been outperforming the broader market. It marked a second straight month of net selling via Hong Kong trading links. While Xiaomi rose on its electric vehicle debut, Tencent and Alibaba shares continued sliding. Analysts cite profit-taking and a lack of fresh catalysts as key drivers.

Alibaba Steps Up AI Efforts

Elsewhere, Alibaba is doubling down on artificial intelligence (AI) and e-commerce expansion. Its cloud unit launched a third data center in Malaysia and will open another in the Philippines this October, adding to recent builds in Thailand, Mexico and South Korea. Meanwhile, at home, Alibaba’s Taobao announced some $7bn in subsidies to fuel its instant commerce push, targeting food delivery and online retail amid intensifying domestic competition.

Baidu Does Too

Not to be outdone, Baidu [BIDU] is giving its flagship search engine a full AI makeover. In its biggest overhaul in years, the company will shift from keyword-based results to a more conversational, chatbot-style experience, Bloomberg detailed. Facing stiff competition from platforms like Douyin and AI-native browsers, Baidu aims to reverse its four-quarter slide in ad revenue by leveraging generative AI to improve engagement and revive monetization.

Fintech’s Rally Stalls; Prospects Still Rosy

SoFi [SOFI] fell 3.1% after six days of gains totaling 19%, sharply outperforming the S&P 500’s 3% rise. Seeking Alpha analyst Yiannis Zourmpanos earlier this week wrote that the stock’s climb “reflects more than sentiment, it’s the result of a structural shift toward scalable, capital-light revenue… SoFi is evolving into a high-margin fintech engine poised to outperform its valuation over time”. Read OPTO’s recent deep dive into SOFI stock here.

A European Challenge to US AI Dominance?

Swedish AI coding start-up Lovable is nearing a $1.8bn valuation, just two years after launch. The company, which allows users to build apps simply by typing instructions, is raising over $150m in a round led by Accel, with 20VC and Creandum also participating. The deal highlights Europe’s growing ambition in AI, despite trailing the US and China in foundation model development, the Financial Times reported. 

California Jury Finds Google Guilty

Alphabet’s [GOOGL] Google has been ordered to pay $314.6m to Android users in California after a jury found it misused cellphone data without consent. The lawsuit accused Google of collecting data from idle devices, placing an “unavoidable burden” on users, according to Seeking Alpha. Google plans to appeal, claiming the verdict misunderstands essential services. 

Hims vs Novo: What’s Going On?

The partnership between Hims & Hers [HIMS] and Novo Nordisk [NVO] has unraveled in the past week. Novo pointed to Hims’ marketing tactics and its continued sales of Wegovy copies; Hims CEO Andrew Dudum, meanwhile, accused Novo of trying to control clinical trials to steer patients toward using Wegovy. OPTO examines the stormy relationship between the two firms, the investment case for each and the role they play in the lucrative and increasingly crowded weight loss space.